Neiman Marcus 2009 Annual Report Download - page 120

Table of Contents
administrative expenses. At July 31, 2010, unearned non-cash stock-based compensation that we expect to recognize as expense
through fiscal year 2015 aggregates approximately $5.5 million.
NOTE 12. INCOME TAXES
The significant components of income tax (benefit) expense are as follows:
Fiscal year ended
(in thousands)
July 31,
2010
August 1,
2009
August 2,
2008
Current:
Federal $ 31,596 $ (66,168) $ 108,467
State 4,572 (389)19,976
36,168 (66,557)128,443
Deferred:
Federal (35,518) (132,442) (37,693)
State (4,125)(21,446)(6,934)
(39,643)(153,888)(44,627)
Income tax (benefit) expense $ (3,475)$ (220,445)$ 83,816
A reconciliation of income tax (benefit) expense to the amount calculated based on the federal and state statutory rates is as
follows:
Fiscal year ended
(in thousands)
July 31,
2010
August 1,
2009
August 2,
2008
Income tax (benefit) expense at statutory rate $ (1,860) $ (310,972) $ 79,319
State income taxes, net of federal income tax benefit (1,666) (23,311) 5,821
Impairment of nondeductible goodwill — 115,398 —
Tax expense (benefit) related to tax settlements and
other changes in tax liabilities 354 (378) 159
Impact of non-taxable income (245) (897) (1,709)
Impact of non-deductible expenses 73 82 226
Other (131)(367)—
Total $ (3,475) $ (220,445) $ 83,816
Effective tax rate 65.4% 24.8% 37.0%
In fiscal year 2010, we generated a loss before income taxes of approximately $5.3 million, which resulted in a recorded
income tax benefit of approximately $3.5 million and an effective tax rate of 65.4%. The effective tax rate exceeds the statutory rate
primarily due to the relative significance of state taxes, non-taxable income and non-deductible expense to our pretax loss. For fiscal
year 2009, we generated a loss before income taxes of approximately $888.5 million, which resulted in a recorded income tax benefit
of approximately $220.5 million and an effective tax rate of 24.8%. For fiscal year 2009, no income tax benefit exists related to the
$329.7 million of goodwill impairment charges recorded. Excluding the impact of the goodwill impairment charges, our effective
income tax rate was 39.5% for fiscal year 2009.
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